Farmland values hit record high in survey

Low interest rates and high interest by investors pushed Iowa land values to a record level in the latest Iowa State University Extension Department survey. Economist Mike Duffy released the survey today (Wednesday). He says the average value of an acre of land in the survey was two-thousand 275-dollars — up nine-point-two percent — and an historical high. The previous record high was in 1981 at 21-hundred and 75 dollars-an-acre. Duffy says land values increased in all 99 counties — with a statewide average increase of 192 dollars-an-acre. The most expensive land according to the survey was in Scott County at three-thousand-697 dollars, and the lowest in Decatur County at 936-dollars an acre. Duffy says the historically low interest rates were one of the leading factors in the increase in land values.He says over half of the people in the survey cited the interest rate. He says increased demand by investors also pushed prices up. Duffy says about 34-percent of the land purchases were by investors, which has led to more outside ownership. He says in 1982, about 92-percent of the land was owned by people that live in Iowa, today it was about 81-percent. Duffy says the federal ag money is another big factor in the value of Iowa farmland.He says if you look at the percent of Iowa’s income that comes from federal payments — it averages 50 percent. He says the government payments are a significant factor in the value of the land. Duffy says the owners of Iowa farmland are grower older. He says the over 75 owner went from 12-percent in 1982 to 24-percent in 2002. He says when you add in the 65 and older owners, it’s 48-percent, so nearly half of the land in Iowa is owned by people who’re 65 and older. Duffy sums up his observations from the survey. He says we’re in a “real interesting market” and not just because we set a peak. He says we’re at a level in nominal terms that we’ve never been at before. For complete results of the survey, surf to: www.iastate.edu and follow the extension department links.